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OIC proposes criminalizing insurance fraud, seeks expanded restitution for victims
Summary
OIC staff previewed a draft bill that would define insurance fraud as a Class B felony, expand recognized victims for restitution to include consumers and beneficiaries, and address venue and statute-of-limitations issues to aid prosecution.
The Office of the Insurance Commissioner presented draft legislation to modernize its insurance-fraud authority, including a proposal to define insurance fraud as a crime and designate it a Class B felony.
Dori (criminal investigations unit) said the draft bill would enumerate activities that constitute insurance fraud, set the mental element as acting "knowingly and with intent to defraud," and expand restitution to include insurance consumers and beneficiaries. The proposal also includes venue and statute-of-limitations clarifications to support effective investigations and prosecutions.
The presenter said the draft incorporates recommendations aligned with the National Insurance Fraud Model Act and cited an estimate from the Coalition Against Insurance Fraud that such fraud costs about $3,700 per household annually; a total-dollar figure given in the briefing was unclear in the transcript and should be verified against the OIC's published materials.
No formal legislative text was finalized at the briefing; OIC staff said the measure has been stakeholder-reviewed and will be shared with interested parties for comment.
Next steps: OIC will continue stakeholder outreach and provide draft language and analyses to the Legislature.
